Universe, time and humans-part 1: Money.

I went to hostel last night and had a good chat about everything on the planet with Isham Roy, one of my good friends. This blog tries to sums up the conversation. The conversation just portrays the views of both/either of us. It might not be accurate where the facts are concerned, but we nevertheless had fun talking about it.

It all started about what a man can do and achieve. From the stage of caves to AC lounges, man created it all. The system, the technology, the religion, the loop holes and everything else. Constantly in search of answers to new questions, man is uncovering new grounds and paving way for further questions exponentially. A few of those elites, who have dedicated their lives to finding out the answers to the questions, help the society in seeing truth, or something near to it.

Money :

Man created money as an universal exchange unit. It was barter system before. People used to exchange goods for goods. But the value of goods vary according to geography, availability and culture. Gold in Eldorado is like steel/brass for us ( El dorado is a hidden city of gold, ruled by a harmless adorable fat chief, its a movie.) So money was invented as a means of universal exchange. Now it came to a stage where money also has different value based on geography, availability and culture, but that is a different line of talk, and we did not go there. Well, there is this obvious question that which, Im sure everyone would have thought of. "If every country has their own mint, why don't you print as much as you want, feed the hungry, develop the country and be the most awesome country on the planet?" If you asked this question any stuck-up bloke out there, instead of explaining it, he gives you a that's-a-really-silly-question kind of look, and says because it will lead to inflation, and the value or rupee will go down and stuff like that, which definitely you would have thought "what the heck, how?" But surely would have said "Oh, okay, like that !"



Well, here is an example. Money is only as valuable as the goods it can trade. Say there are three apples on this planet and there are two guys. One guy has all the three apples and the other has all the money in the world. So now the money is useless for survival if that guy who has apples refuses to trade his apples ! To woo the apples guy, the guy with the money can go the length of buying an apple for a billion or more. As the supply decreases, demand for it increases. So if the commodity decreases, the resultant value of the remainder increases. Now extend this example to a country, the resources it has and the trade of money and the value involved. But who decides and weighs the value of the commodity that is circulating in the country? May be the finance guys at reserve bank, or economics nerds from IIMs?